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Pros and Cons of Xero Accounting Software

Xero is a cloud-based accounting information system that helps small and medium-sized businesses carry out their daily transactions. It is a great usability software that allows you to see how the accounts work.


1. Collaboration: It allows collaboration between companies and financial advisors. Other Xero users can view the published financial reports and other transactions in real-time.

2. Online bookkeeping: Xero allows you to create invoices, simple inventory, record fixed assets, pay bills, reconcile, generate financial reports, and payroll. These are some of the important features needed by small businesses.

3. User-friendly: This accounting software makes your work easier and it is easy to use. Various features allow you to do accounting tasks much faster like switching between clients, reconciliations or financial reporting.

4. Real-time reconciliation: All categorized transactions can be reconciled at the same time leading to a one-step reconciliation process. Xero offers you real-time bank feeds and reconciliation.

5. Add-on integration: Automation and linking of data through various add-ons makes your work easier and saves time and money.
There are various third-party add-ons that can be integrated with the software to make work easier.

6. Cost-effective: Compared to other accounting software, Xero provides cost-effective accounting solutions to small and medium-sized businesses.

7. Cloud-based service: It is a comprehensive cloud-based service that can be accessed from anywhere as long as you have internet facilities.

8. Compatible: The software is compatible with the latest mobile technologies like smartphones and tablets. You can access your online account through your smartphone and generate financial and management reports.

9. Flexible: It allows you to keep track of your finances and all the transactions taking place.

10. Multiple users: The Cloud-based software allows you to set up multiple user-level permissions in your account. Each user may have different account access rights based on their roles.


1. No inventory tracking: The smaller version of Xero doesn’t allow inventory tracking or purchase orders.

2. Restrictions: The starter pack has restrictions on the number of transactions that can be done per month and you can’t use multiple currencies.

3. Learning curve: Many Xero users say it is not very intuitive and there is some learning curve. The new dashboard organization is not as great as the old one. You need to have an experienced Xero accountant to help you with all the transactions.

4. Not suitable for complex processes: Xero is great for small businesses. It doesn’t work well with bigger or complex business processes. It is limited to some businesses. Lack of stock control feature limits the use of software in foreign exchange transactions and stock control businesses.

5. Unreliable support: The customer care support system is very slow and most of the time unreliable. No telephone support at all and their communication is via email which at times takes a day before you get a response.

6. Robust invoice system: The software needs a more robust invoicing system with more payment provider add-on in order to accept payments via ACH instead of relying on credit cards only. There is only one payment option for the clients to use.

7. Limited mobile apps: Mobile functionality apps are not as great as compared to the desktop version. There are a lot of bugs and errors reported for the iPhone apps.

8. Limited expense claims: It doesn’t offer multi-currency support and payroll in its price plans. Project management is also limited to the most expensive plan and users are complaining of the increased price.

9. No paid notification: The software doesn’t notify you once the invoice is paid by a client. To confirm payment, you have to log in to the account and check for payments on the invoices.

10. No partial payment from the client: If a client wants to have half the amount, they cant use the “pay now” feature which allows them to pay the full amount. To pay a partial amount, they have to send money to you and then manually apply the partial payment to the invoice.

This Post Has One Comment

  1. Martin Park

    I just want to say thank you so much for sharing your blog.

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